Impacts of Hydraulic Fracturing and Completion Decisions on Shale Gas Well Productivity
34 Pages Posted: 16 Oct 2012
Date Written: October 16, 2012
We develop a model for optimal discrete periodic capital investment and dynamic production of shale gas wells and econometrically estimate early period cumulative production functions for vertical and horizontal well technologies. Results indicate reservoir and completion outcomes have significant impacts that are consistent in sign across the two technologies, but the magnitudes and probabilities of these impacts vary, sometimes substantially so. The impact of completion decisions on cumulative production is highly variable, with differences in early period production declines across the two well technologies. These results may, in part, explain the downward trend in reserve estimates for shale gas, as there is uncertainty in the impact of completion choices early period production.
Keywords: Shale gas, technology, production function
JEL Classification: Q4, Q41, Q49, Y80
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